The cryptocurrency world has been in the throes of a bear market for more than four months, with no sign of it ending soon. After reaching an all-time high in December 2017, Bitcoin (BTC) lost more than 80% of its value by February 2018 and hasn’t been able to climb back out of that hole since.
Many other cryptocurrencies followed suit, with the total market cap sinking from $800 billion to $194 billion by the end of February this year. Clearly, things are pretty bleak right now, but some coins have fared better than others during this down period.
What is a crypto killer app?
Cryptocurrencies have seen their fair share of hype and bubble, which is starting to turn into a correction. The question that investors, traders, and enthusiasts are asking themselves today is whether all these cryptocurrencies will survive.
While nobody knows for sure how it’s going to end, there are some important traits common among all winners in history—traits that we can use as a framework to guide our investments during these times of turmoil.
Here are three crypto killer apps worth investing in right now.
1) Memeability Crypto has been at its most valuable when it's easiest to share with other people and communities. This isn't just true of memes; it's true of any form of currency. If you want your currency to be successful, you need people to spread your brand through word-of-mouth marketing.
2) Scarcity Scarcity is what makes things valuable in nature—gold and diamonds are both scarce resources, but they're valued because they're rarer than many other commodities (like copper).
Gold doesn't really do anything besides looking pretty, but that scarcity makes it an attractive investment option for those who value rarity over utility.
3) Utility Value is what gives something purpose—what does your coin do? Is it only good for trading on exchanges or does it serve another purpose?
Two Categories of Cryptocurrencies
The first is an obvious outlier. Bitcoin is nothing short of unprecedented success, and it’s hard to believe any other crypto (digital asset) will be able to dethrone it for years.
But it’s also important to note that Bitcoin is not alone in what is currently referred to as the altcoin space. It has thousands of competitors, each with its own unique value proposition and use case.
Some of these were issued through initial coin offerings (ICOs), which have raised over $11 billion in funding so far, while others are now traded on popular exchanges such as Coinbase, Bitfinex, Kraken, and Binance.
There are some big names among them, including Ethereum ($23 billion market cap), Litecoin ($3.7 billion), and Ripple ($9.8 billion). These three cryptocurrencies combined account for more than half of all money invested into ICOs since 2014.
At one point last year, they even made up a third of all cryptocurrencies by market cap—which means they could still be around when Bitcoin finally fades away...But will they?
This question is difficult to answer because there are no clear metrics that can predict whether a certain cryptocurrency will succeed or fail.
The Future of Cryptocurrencies
The current bear market is a great time to think about what’s coming next in crypto. The rise of altcoins was followed by a bull run that brought bitcoin and several other coins to astonishing highs (particularly in December 2017).
Now, after a tumultuous 2018, many of those cryptocurrencies have fallen back down to earth. And while it’s impossible to predict which coins will emerge as winners from all of these crashes, there are certainly some solid contenders out there. Here are some crypto assets that could become go-to investments over 2019 and beyond.
Some of these currencies have begun to look like viable alternatives to bitcoin. NEO, for example, is often called the Chinese Ethereum because its goal is similar: to create a platform for developers to build decentralized applications on top of it.
It has been in development since 2014 but didn’t gain real traction until last year when its price spiked nearly 500 percent (in US dollars) in January alone.
NEO has pulled back significantly since then, but its introduction onto multiple exchanges including Binance and Bittrex demonstrates growing interest from investors in both China and around the world.
Is There Hope in 2019 and Beyond?
Cryptocurrencies have struggled in 2018, but 2019 could be different. Right now, there are two main ways to look at cryptocurrencies.
1) a HODLer perspective that sees cryptocurrencies as long-term investments.
2) a trader perspective that sees them as short-term trading opportunities. If you are still new to the game and don't know much about how to make money with cryptocurrencies yet, I recommend playing it safe and focusing on how to HODL.
This is where things get interesting because there are several factors that can affect your investment's value over time. For example, if you bought $10 worth of Bitcoin back in 2010 when it was first invented, today your investment would be worth more than $5 million!
However, if you bought $10 worth of Bitcoin back in December 2017 when its price was around $20K, today your investment would only be worth around $3K because of its dramatic drop from all-time highs... so what does all of this mean for investors looking to invest in cryptocurrencies today?
The truth is that no one knows for sure which coins will survive beyond 2019... but here's my best guess based on my own research and analysis.
How Will This Play Out in 2019–2020?
As we look ahead to 2019 and 2020, it is likely that only a handful of cryptocurrencies will emerge as viable investment opportunities. Because most new coins aren’t even being used in real-world scenarios yet, they are difficult to evaluate in terms of how well they serve their purpose and use cases.
After all, most people hold the currency for one reason: to exchange it for goods or services at some point in time. If a currency cannot do that now (or if you don’t see any compelling reason why it could become feasible in short order), then what good is its value proposition?
Conclusion
The future of cryptocurrencies is unclear, but what’s certain is that investing in them today can be extremely risky. For example, if you purchased $1000 of bitcoin in January 2017 and held it until October 2018, your investment would be worth only $160.
This has been a rough year for all cryptocurrencies and investors have been shaken to their core. Many cryptocurrencies simply aren’t worth investing in—at least not at current prices.
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